Russia, the guest of honor at BEA this year, opened with a panel on its book and publishing market, introduced by Vladimir Grigoriev, the deputy director of the Russian Federal Agency of Press and Mass Communication. Grigoriev was joined by colleagues Oleg Novikov, CEO and founder of EKSMO, Russia’s largest trade publishing house, and Yuri Deikalo, CEO of AST/Astrel, one of the largest publishing groups in Russia.

Seventy publishers and 30 booksellers, along with writers, literary critics, and librarians, have come from Russia as part of Russia’s BEA program, which includes the Russian Library Project, whose goal is new translations of the classics and also translations of contemporary works in both print and digital. The Russian market is huge, with Grigoriev putting it at $3 billion, with 4,000 publishing houses publishing 650 million copies of 1,000 titles a year. Despite this, Russia faces the same problems as other nations, with a decline in reading and in the volume of books sold. Novikov showed a chart documenting the decline, from a peak in 2008 of $2.9 billion to 2011’s $2.2 billion, with the adult fiction market the most challenged. Interestingly, independent bookstores are seeing a drop in business yet they retain the largest market share.

To encourage reading, the government offers subsidies to the publishing industry of $5 million–$10 million a year. Russia, Grigoriev acknowledged, is “a great nation of literature” yet is also considered an emerging market. Andrew Nurnberg, a London agent, noted that 40 years ago Russia had no copyright protection and all publishers were owned by the state; censorship was strict, very few Russian authors were published outside of Russia, and few Western books were translated except for the perennials—Iris Murdoch and Danielle Steel.

But while young people’s interest in reading is suffering in Russia as it is universally, writers are still a cornerstone of the culture. The economic downturn has also stalled growth, but the main problem in Russia is piracy of digital titles. To show how the world has changed, when Putin met George Bush in 2000, they discussed the problem of copyright; now in 2012, it’s digital piracy, which is both a technical and a legal issue. Grigoriev emphasized that digital books are the key to the future (in the next four to five years, he estimates, 80% of Russian households will be wired and will have Internet access), therefore Russia is concentrating on internal piracy. But while the U.S. approach is to punish users, Russia must go after the providers, he says, or “millions of people would be put in jail.”